Virgin Active is planning to open clubs in Asia for the first time as the
health club business shifts its focus east in the face of the economic
slowdown in Europe.

The company – owned by private equity firm CVC and Sir Richard Branson's Virgin Group – is set to use an expansion programme in Australia as a springboard to move into Singapore and other countries in south-east Asia.

News of Virgin Active's plans come as the company will tomorrow unveil a 4pc increase in like-for-like sales to £536.2m in 2011 and a 9pc rise in earnings before interest, tax, depreciation and amortisation to £126.8m.

The company's membership has climbed 25pc to 1.21m customers following Virgin Active's acquisition of 53 Esporta clubs in July last year, leaving it with 259 sites globally.

"We're looking east," said Matthew Bucknall, chief executive of Virgin Active. "We acquired four clubs in Australia when CVC came on board as a 51pc shareholder in October, and we're looking to roll that out to 20-25 clubs in the country.

"We will then use that as a base to expand into south-east Asia. We'll probably look at Singapore first, then perhaps Thailand and Malaysia ."

Related Articles

Virgin Active has focused on its southern European business in Italy, Spain and Portugal in recent years , but Mr Bucknall said the eurozone crisis had led to a rethink in strategy.

"We performed pretty well in continental Europe in 2010 and the first half of 2011 but things have tailed off since then," he said. "The key in Europe is to recalibrate returns. We have stopped all provincial development and are just concentrating on locations in key cities."

The company still plans to open as many as 16 clubs this year – in Italy, Spain and South Africa – having opened 10 in 2011.

In the UK – where the company still makes 47pc of its revenues – Mr Bucknall said trading conditions remained difficult. "It's tough. You've got to be on your game. In 2010/11, member usage was up 3pc; in the first five months of this year it's up 5pc."

Mr Bucknall said the company had secured a new deal with its banks last month. "We're now fully funded out to 2018 which gives us the capital needed for the Asia roll-out. We have spent the last 18 months fact-finding and have got 12 locations we're looking at already, with plans to open the first next year."

The health club boss said CVC's clear "five year [investment] time horizon" made planning straight-forward. A flotation at some stage remains a possibility, he added. "We would make a good public company. We have a track record of continual double-digit growth and have been resilient through the economic downturn."